Originally posted by Flubber
NYE
Obviously we disagree. I believe that when an oil company is asked what an impact will be of something and then answers truthfully, it is not a "threat".
NYE
Obviously we disagree. I believe that when an oil company is asked what an impact will be of something and then answers truthfully, it is not a "threat".
They peddled blatant lies in an attempt to intimidate.
Originally posted by Flubber
Oh and I wanted to address this one. I agree that Alberta has not gotten a lot of revenue on oilsands. The reality was that the two Suncor and Suncrude projects were developed in an environment of $20 oil and many many in the industry thought they would never make money. But a higher initial royalty back then would have meant no projects. AS it was, there wee times when the projects were severely questioned (like when oil hit 12 bucks in 1998)
Oh and I wanted to address this one. I agree that Alberta has not gotten a lot of revenue on oilsands. The reality was that the two Suncor and Suncrude projects were developed in an environment of $20 oil and many many in the industry thought they would never make money. But a higher initial royalty back then would have meant no projects. AS it was, there wee times when the projects were severely questioned (like when oil hit 12 bucks in 1998)
Why should the industry have a problem with the government not wanting to participate in any more one-sided deals when we clearly do not need additional development?
I have sat through some of the meetings where large capital projects are discussed-- The types of things where you need to spend a billion a year for 5 years before a project even STARTS producing. The economics of these types of projects are very sensitive to things like interest rates and royalties in the initial stages . .. things that delay the repayment of capital investments. Now the boom of the Alberta economy has seen the capital costs of oilsands projects skyrocket such that many of them are not economic at all even with $50 or $60 dollar oil. Add material additional royalties on the early barrels and you could get to a situation where none of the new projects are economic. Again-- not a threat-- just a factual assessment
It's also a factual assessment that Alberta's royalty regime was and still remains among the most generous, if not the most generous for the industry in the world. Furthermore, the costs to the people of Alberta have been high, too high according to some.
It's also a factual assessment that there is no way, no how, that the people of this province were going to tolerate continued and further sweetheart deals for oilsands development that saw nothing of note coming back when the price of oil was over $80/bbl 30 years after a development began.
I do not think the Province, or the people of the Province, have been out of line to say 'hey now, this is going to have to change.'
The generic oilsands regime tops out at a royalty of 25% IIRC-- thats hardly peanuts.
NYE
People talk about a fair share ... I have never known what that is when we are talking about a royalty . IS 10% fair? 20%? 50 % I can know what is possible or economic on a given project. We see it all the time when we farmout lands-- One time you can get a 15% royalty while the next 5% is all that is possible (any more and the math on the project simply does not work).
People talk about a fair share ... I have never known what that is when we are talking about a royalty . IS 10% fair? 20%? 50 % I can know what is possible or economic on a given project. We see it all the time when we farmout lands-- One time you can get a 15% royalty while the next 5% is all that is possible (any more and the math on the project simply does not work).
What pisses off a good number of people in this Province is that the oil industry is complaining about being asked to pay a larger portion of what the rates are elsewhere, and that they actually start paying on the oilsands.
I'm sorry, Flubber. I have less than zero sympathy for an industry that seems to be insisting that the only way they will develop Saudi Arabia with a cowboy hat is if the Province pays for the entire cost of the project and does not see a dime above 1% over 30 years after digging began.
It ain't gonna continue happening, and that is a factual assessment. Sorry if it makes you unhappy.
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